Insights on understanding compensation and negotiating pay.
For the working class a good salary can be a critical component in overall career and personal satisfaction. As a recruiter working with various types of career professionals we approach the compensation topic every day with candidates. When evaluating an offer or current salary it is important to take into consideration multiple factors. A few factors we often look at are current or most recent basic salary, commission, bonus structure, benefits, profit sharing, stock options, 401k matching, and equity are a few variables that can directly contribute to the total compensation.
Setting the ground work for this topic we refer to the definition and description of Salary.
"Salary is a fixed amount of money or compensation paid to an employee by an employer in return for work performed.
Salary is typically determined by comparing market pay rates for people performing similar work in similar industries in the same region. Salary is also determined by leveling the pay rates and salary ranges established by an individual employer. Salary is also affected by the number of people available to perform the specific job in the employer's employment locale."
Source: Salary - https://en.wikipedia.org
The definition of salary is fairly elementary here but the clip regarding determining a salary here is much more informative. There are many factors that should be considered that are external influences of compensation such as local cost of living, and available supply of talent. This refers to the economic principles of supply and demand. There are many great free resources online to collect salary data such as BLS.gov, Indeed, GlassDoor, PayScale, and many other sites including our very own free salary tool. Another data point worth noting is the skills gap index which determines the active demand and supply for specific occupations.
Now that we have done a little market research and have data for reference we can evaluate a career opportunity from the bigger picture. Be sure to ask yourself how much you like your current job or prospective job, where do you see yourself in five years, and other intangible factors that can contribute to your personal and professional growth. In a recent ASA survey employed adults identified work-life balance, schedule flexibility and compensation as key factors to job satisfaction and ultimately retention and/or recruitment.
In summary here are some general tips on how to evaluate a compensation plan. Do your research, there are great tools and resources available on the internet. Evaluate the overall benefits, does a new or current opportunity offer growth potential, flexible schedules, and work life balance are all things to consider related to compensation. Finally give yourself time to think, prepare and present the research data to suggest a counter offer or pay raise.